Kewell, currently in charge of English League Two side Crawley Town, believes the next national team coach should be home-grown.
"I’d like to see an Australian coach take (the Socceroos job) because I like the identity of being Australian," Kewell said on SEN.
"There is no better way than to give an Australian a chance to lead their country out in a World Cup.
"I think it would be fantastic for us and a real statement – hopefully it’s what (the FFA) decide in the end."
While the FFA are reportedly leaning towards a foreign figure to lead the side on a short-term stint until the end of the World Cup, the former Leeds United and Liverpool winger believes Arnold is the best man for the job.
Asked if he would back the Sky Blues coach for the Socceroos role, Kewell replied: "Yes I would.
"He’s dominating the A-League. He had a bit of a bad spell in Asia but he has come back, taken over at Sydney, and from the reports I get, no one can catch him.
"He’s got the best team. The strategy he’s got is far better than anyone else's."
The FFA will announce the next Socceroos head coach in February - one month before scheduled friendlies against Norway and Colombia.